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A BILL TO BE ENTITLED
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AN ACT
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relating to certain variable insurance contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 1152, Insurance Code, is |
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amended by adding Section 1152.110 to read as follows: |
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Sec. 1152.110. PRIVATE PLACEMENT CONTRACTS. (a) In this |
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section, "private placement contract" means a variable annuity |
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contract or variable life insurance policy that is: |
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(1) issued exclusively to an accredited investor or |
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qualified purchaser, as those terms are defined by the Securities |
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Act of 1933 (15 U.S.C. Section 77a et seq.), the Investment Company |
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Act of 1940 (15 U.S.C. Section 80a-1 et seq.), or the regulations |
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promulgated under either of those acts; and |
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(2) offered for sale and sold in a transaction that is |
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exempt from registration under the Securities Act of 1933 (15 |
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U.S.C. Section 77a et seq.). |
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(b) A private placement contract may provide that the |
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insurer issuing the contract may defer payments or advances for |
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loans, cash surrender values, or death benefits until the separate |
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account assets, or any portion of the separate account assets, |
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comprising rights to loans, cash surrender values, or death |
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benefits can be converted to cash under any applicable terms. |
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(c) Section 1103.104 does not apply to the computation of |
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the interest on the proceeds of a private placement contract. |
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SECTION 2. Section 1101.011, Insurance Code, is amended to |
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read as follows: |
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Sec. 1101.011. TIME FOR SETTLEMENT OF CLAIM. (a) Except as |
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provided by Subsection (b), a [A] life insurance policy must |
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provide that settlement under the policy after the death of the |
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insured will be made not later than two months after the date of |
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receipt of proof of: |
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(1) the death; and |
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(2) the right of the claimant to the proceeds of the |
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policy. |
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(b) A private placement contract issued under Section |
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1152.110 may provide that: |
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(1) settlement of that portion of the contract |
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attributable to separate account assets is subject to the liquidity |
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of those assets; and |
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(2) the portion of the contract described by |
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Subdivision (1) must be settled by the insurer when the separate |
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account assets are converted to cash under any applicable terms, |
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which may be a period longer than the two-month period described by |
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Subsection (a). |
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SECTION 3. Section 1103.102, Insurance Code, is amended by |
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amending Subsection (a) and adding Subsection (c) to read as |
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follows: |
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(a) Except as provided by Subsection (b) or (c), if an |
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individual obtains a policy insuring the individual's life, |
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designates in writing a beneficiary to receive the proceeds of the |
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policy, and files the written designation with the company, the |
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company shall pay the proceeds that become due on the death of the |
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insured to the designated beneficiary. |
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(c) A private placement contract issued under Section |
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1152.110 may provide that: |
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(1) settlement of that portion of the contract |
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attributable to separate account assets is subject to the liquidity |
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of those assets; and |
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(2) the portion of the contract described by |
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Subdivision (1) must be settled by the insurer when the separate |
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account assets are converted to cash under any applicable terms, |
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which may be a period longer than the two-month period described by |
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Section 1101.011(a). |
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SECTION 4. The change in law made by this Act applies only |
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to a private placement contract that is delivered, issued for |
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delivery, or renewed on or after January 1, 2008. A private |
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placement contract that is delivered, issued for delivery, or |
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renewed before January 1, 2008, is covered by the law in effect at |
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the time the contract was delivered, issued for delivery, or |
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renewed, and that law is continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2007. |